Ken Kinkopf is founder and president of Kinkopf Capital Management, LLC. Mr. Kinkopf is an associate member of the National Futures Association and registered with the Commodities Futures Trading Commission as an associated person and principal of Kinkopf Capital Management. Ken Kinkopf founded Kinkopf Capital in April of 2005 and is responsible for all trading decisions and management of the firm.
Mr. Kinkopf has over 25 years of market forecasting experience and has sustained in all market conditions during the period. Ken has extensive expertise trading the S&P 500 Equity Futures since 1989. He is committed to Risk Management and believes that discipline will allow his investment strategy to remain viable in the face of market adversity. Ken has been trading this systematic, non-discretionary trading program since 1999.
In May of 1991 until 1996, he co-foundered and became president of K&D Financial Corporation in New York, which provided sell-side financial advisory services in the managed futures industry. The company was registered with the CFTC as a CTA and was a member of the NFA. Mr. Kinkopf managed client accounts using a discretionary trading system. In addition, he also provided technical advice for two forecasting advisories and wrote articles discussing several of the statistical tools and techniques used in his forecasting models. In 2003, Ken Kinkopf also co-founded KD Development Group LLC, a company that provided retail franchising services, business consulting, and security reviews. Ken Kinkopf was acting president managing a 35-employee team before selling his interest to focus his attention on Kinkopf Capital.
Mr. Kinkopf is also a guest speaker and technology consultant. He spoke at Terapinn Quant Invest, High Frequency Leaders Forum and Wall Street & Technology events. He has written white papers on Quantitative trading methods and technology required for systems implementation. Ken Kinkopf also was a World Cup Advisor sponsored by Robbins Trading. In November of 2007, Mr. Kinkopf was one of eight global speakers invited to present forecasting strategies at the Taiwan 2007 Futures Trust Enterprise Forum in Taipei to help foster development of trading in the emerging market.
An Interview with Ken
The Early Years
Ken's fascination with the stock market started at the age of 15 when in 1982, the market broke out of a long term downtrend. At the age of 16, Ken placed his first trade with the help of his father. He began to track the market using the first version of Lotus 1-2-3. Ken was an early adopter of technology using the TRS-80 as his first computer.
With an interest in aviation, Ken's education comprised of six years of aviation technologies focusing in electrical engineering and avionics. He earned his FAA A&P licenses and FCC Avionics license in the mid to late 80's.
Ken was fascinated by electronics. "I would see repeating patterns on oscilloscopes and test equipment that would be akin to cycles, wavelengths and amplitudes in stock market patterns" said Ken. Aircraft navigation and communications systems turned into a gateway for intense study on market patterns. Ken embarked on a study of statistical analysis, probabilities and forecasting models.
Using these new skills, Ken analyzed vast amounts of market data using an advanced statistical analysis software called Statistica in the early 90's. Mr. Kinkopf obtained his series 3 license shortly after and co-founded KD Financial Corp. Ken was already writing algorithms before he was aware of commercial charting software. When he looked into these programs, he realized that they lacked any analytical capabilities at all. He wrote for magazines and advisory publications on his unique analytical systems. It was not until the late 90's that Ken combined all the rules into a nondiscretionary systematic trading system.
How does Aviation and Finance go together?
Ken Kinkopf has a favorite analogy: "You can learn a lot about sustainable trading systems by understanding aviation." It's not surprising that Kinkopf would lean in this direction. He knows that at 30,000 feet, safety redundancy is essential. After more than 25 years as a professional trader, he has learned that attention to safety is no less critical when designing and trading automated systems.
"I have learned from my technical background that every trading system must have fail safe in triplicate," Ken says. "Protection from failure is crucial. This is why aircraft systems have multiple layers of redundancy. It is the same principle that protection from financial ruin is crucial. You want to make sure that you are able to sustain your account so that you are around for tomorrow's recovery. There must be multiple levels that protect your account in times of market uncertainty. Fifteen years of successful trading DOES NOT HAPPEN by Chance!"
Early Warning System
Ken was already working on a method that detects abnormal volatility between various datasets in early 2007. When several of his queries alerted him of correlations that were rapidly exceed historical norms by a high magnitude, he immediately implemented a system called "Volatility Scaling". He did this in December of 2007 BEFORE the markets catastrophic collapse. Doing so allowed Mr. Kinkopf system not only survive but strive in the years that follow. "I really had no idea what was coming or how to profit from it. I just want to ensure I was ready to ride out a storm that exceeded anything I've seen since 1973" Ken added. Ken follows an unusual array of information that ranges from money supply, income, business activity, credit and international trade.
The Future Forecast
When asked if Mr. Kinkopf foresees another event ahead, Ken says "I cannot tell you where the markets are heading but can say that when correlations move historically out of whack, then something is brewing." Ken further states " In late 2013, various datasets on the economic numbers again started to move outside their historical proportions. I'll say that they are not in the same magnitude as 2007 but in a similar fashion. I was already working on a parallel system that closely tracks the main system. Looking in the past, when the parallel system does not tract closely, then exposure should be reduced" In April of 2014, Ken formally implemented the parallel system named Octagle within the core trading engine to further prepare for future market uncertainty.
Ken has an impressive run on performance awards also. Most recently, he was listed in the "Top 20 Hedge Funds for 2012" as published by Bloomberg. He was also listed in the "Top 10 Traders of 2012" and "Top 10 Traders of 2009" as published in Futures Magazine based on the Barclay Hedge database. Finally he won five (5) CTA trading contests winning $2 million in allocations from 2006-2010.